August 21, 2018

More money expected in warehouse labor's holiday stockings, staffing firm survey finds

Employers may pay holiday premiums as high as $2 an hour to get, keep warehouse talent, EmployBridge finds.

By DC Velocity Staff

As might be expected in an environment of strong economic demand and low employment, Santa will be more generous to warehouse labor this holiday season than in years past.

Warehouse operators are prepared to offer as much as $2 an hour over prevailing average wages to attract and retain workers during the peak holiday season, according to an annual survey of nearly 16,000 hourly workers conducted by Atlanta-based Employ Bridge, whose units, which include ProLogistix, ResourceMFG, and Select, staff and manage hourly warehouse labor to companies nationwide.

The $2-an-hour peak-season premium would be above the prevailing hourly rates for labor, according to Brian Devine, senior vice president at Employbridge and creator of the survey, now in its eleventh year. The average current wage is at $13.30 an hour, up from $12.54 an hour at this time in 2017, according to Devine. The average wage runs the gamut from an entry-level worker to a skilled lifttruck operator, he said.

Devine cautioned that the $2 an hour premium is at the high-end of the premium-pay scale, noting that companies that either don't have a holiday peak, or any peak at all for that matter, may pay nothing. Last year's peak season premium averaged $1.02 an hour, Devine said.

As has been the case every year since the survey was launched in 2007, pay ranked as the most important consideration among warehouse workers. For the first time, at least 65 percent of warehouse workers reported earning hourly rates of $12 or more. That compared to just 26 percent in 2014, according to the survey. Devine said $12 an hour has become the de facto minimum wage inside the four walls.

Devine said there is more room for hourly wages to run, projecting another 80 cent and hour an increase over the next 12 to 18 months. Part of the expected rise is that wages are playing catch-up. From 2002 to 2014, hourly warehouse wages rose only 5.5 percent, while the cost of living grew by 29 percent, according to EmployBridge data.

When it comes to hourly workers' shift preference, two-thirds of respondents say they want to work first shift and prefer 8-hour shifts. Employers looking to expand their applicant pools for seasonal help and beyond should consider implementing 20-hour workweeks, or an increased number of shorter shifts, both of which would appeal to semi-retirees, students and working parents, EmployBridge said.

Companies that require second or third shifts to meet production demands may need to offer higher pay differentials, the firm added. According to the survey, hourly workers on average desire $1 more per hour to accept and stay on second or third shifts, as compared to just 62 cents an hour in 2011.

In a tight labor market, strict adherence to human resources policies from 7 or 8 years ago may no longer make sense, according to the survey. For example, strict absenteeism policies that result in the termination of otherwise competent workers will result in employers' just backfilling those vacancies with people with similar attendance patterns, EmployBridge said.

In addition, companies must recognize low-income earners' need for paid-time off, according to the survey. Warehouse workers canvassed overwhelmingly prefer to receive their current pay plus five days of paid time off (PTO) rather than a $1 pay rate increase with no PTO.

"Just as employers in many other sectors are re-evaluating and relaxing their hiring criteria requirements and other policies to fill production critical positions, supply chain companies are beginning to do the same," said Devine. "This includes maintaining attendance policies that are reasonable and fair and that take into consideration the realities of hourly workers' limitations."

Given that about 10.5 million U.S. workers have less than a high school diploma, many employers are revisiting their education requirements and relaxing background screenings to secure much-needed talent, according to the company.

The survey data was collected between February and April from 15,883 workers. Respondents included job seekers, and workers employed full-time, part-time or on a contingent basis with at least six months of warehouse experience.

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